Tuesday, Nov. 3, 2015

Corporate Bond Market
Global equities are mixed this morning.  Asian currencies are all up, bolstered by gains in the Australian dollar.  Europe is off a touch ahead of a speech by European Central Bank President Mario Draghi (Euro Stoxx -.37%).  Stateside, DJIA Fut is -38 and S&P Fut is -5.25.  The treasury market is down with the 10yr last at 2.19%.  Oil is up, last trading at $46.46.  Credit is opening up with a firm tone.  The Investment Grade index is -.3 at 76.8/77.3 last.

In corporate news, Activision Blizzard agreed to buy King Digital Entertainment, owner of the leading mobile game Candy Crush Saga, for $5.9 billion.  Blackrock’s cash management business has agreed to manage about $87 billion in assets for Bank of America clients as it seeks to build scale in an industry dealing with new money market regulations.

We saw eight deals price yesterday in the IG market: Unum, Consumer Energy Company, ERAC USA Finance, Southwest Airlines, Ally Financial, Roche, Mid-America Apartments, and Pacific Gas.  All were oversubscribed and performed well on the break.  We are expecting number of deals today.  

Economic data: ISM NY (9:45am), Factory Orders, EX Trans, IBD/TIPP Economic Optimism (10:00am).


Municipal Bond Market
Munis were weaker to start the week as the market continues to look to Treasuries for direction.  Secondary volume was extremely light as the market prepares for about $6 billion in new issuance.   Muni funds continue to face inflows with about $349 million in new cash which should flow directly into the primary.  Today kicks off the pricing of some of the weeks largest deals, specifically $450 million MA trans.   30-day supply is unchanged this morning with $10 billion on tap over the next 30 days versus $10.2 billion Monday.

PR trading remains nonexistent as the market waits on more news out of the island.  We continue to see very little interest in any PR debt and expect it to continue until we see any kind of progress in restructuring talks.   PR benchmark 8’s of 2035 traded around @ $73.00 (11.48%) on Friday after trading around $71 (11.82%) early last week.

30-Day visible supply: $10bn


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